Investing in stocks that pay high dividends can be a smart way to generate passive income and grow wealth. In India, many investors look for the highest dividend paying stocks to get regular returns. Dividend stocks are appealing because they offer a combination of income through dividends and the potential for capital appreciation. By focusing on the highest dividend-paying stocks in India, investors can ensure a steady income stream while potentially benefiting from the growth of these companies. In this article, we'll dive into dividend stocks, their benefits, the key ratios to look at, and much more to help you make informed investment decisions.
A dividend is like a reward that a company gives to its shareholders. It's usually in the form of money or extra shares. When a company makes a profit, it might decide to share some of that profit with its shareholders. This sharing is called a dividend. It's a way for the company to say "thank you" to the people who own its stock. So, when you own stock in a company that pays dividends, you get a little of its profits!
Dividend-paying stocks are like special kinds of stocks. When you own them, the company regularly gives you some of its profits. It's like getting a small bonus for being a shareholder. These profits are called dividends. So, when you buy these stocks, you're not just hoping the stock price goes up; you're also getting paid regularly just for owning the stock! That's why they're called dividend-paying stocks. They're a popular choice for investors who want both regular income and the chance for their investment to grow.
Here is the list of the Top 10 dividend-paying stocks in India. Click respectively to know more about them:
| Highest Dividend Paying Stocks in India 2024 | Dividend Yield (%) |
|---|---|
| 1. Aster DM Healthcare Ltd. | 33.76 |
| 2. Xchanging Solutions Ltd. | 24.3 |
| 3. IL&FS Investment Managers Ltd. | 7.08 |
| 4. Vedanta Ltd. | 6.78 |
| 5. Coal India Ltd. | 5.28 |
| 6. Styrenix Performance Materials Ltd. | 5.14 |
| 7. Indian Oil Corporation Ltd. | 4.92 |
| 8. Embassy Office Parks REIT | 4.68 |
| 9. Bank of Maharashtra | 4.21 |
| 10. Bharat Petroleum Corporation Ltd. | 4.05 |
Here is a complete overview of the best dividend stocks of all time in India, along with their Volume, Market Cap, and Closing Price.
In the Middle East and India, DM Healthcare Private Limited is a conglomerate in the healthcare industry, this is one of the highest dividend paying stock in India that runs pharmacies, medical facilities, diagnostic centres, and hospitals. It provides management and consulting services in addition to primary, secondary, and tertiary healthcare.
Returns:
| 1Y Return (%) | 3Y Return (%) | 5Y Return (%) |
|---|---|---|
| 37.19 | 126.60 | 177.69 |
Xchanging Solutions Ltd provides information technology services as well as business process outsourcing.The company's major offerings span strategic consultation, application maintenance/support, software development, and application deployment services. Among its goods and services is ITO.
Returns:
| 1Y Return (%) | 3Y Return (%) | 5Y Return (%) |
|---|---|---|
| 98.30 | 77.46 | 172.11 |
Infrastructure Leasing & Financial Services Limited (IL&FS) and its subsidiary IL&FS Investment Managers Limited (IIML) primarily focus on infrastructure financing, asset management, and investment banking.
Returns:
| 1Y Return (%) | 3Y Return (%) | 5Y Return (%) |
|---|---|---|
| 81.45 | 85.95 | 204.45 |
Vedanta Limited is an Indian multinational mining company based in Mumbai and also one of the Highest Dividend Paying Stocks in india. It primarily operates iron ore, gold, and aluminium mines located in Goa, Karnataka, Rajasthan, and Odisha.
Returns:
| 1Y Return (%) | 3Y Return (%) | 5Y Return (%) |
|---|---|---|
| 56.21 | 57.34 | 169.22 |
The world's biggest producer of coal is Coal India Ltd. Additionally, the company produces different grades of coking and non-coking coal for a range of purposes.
Returns:
| 1Y Return (%) | 3Y Return (%) | 5Y Return (%) |
|---|---|---|
| 95.71 | 217.86 | 98.70 |
Styrolution ABS (India) Ltd is a leading company in India known for pioneering the development of the market for Acrylonitrile Butadiene Styrene (ABS), a versatile engineering thermoplastic material. The company markets its ABS polymer under the brand name ABSOLAC.
Returns:
| 1Y Return (%) | 3Y Return (%) | 5Y Return (%) |
|---|---|---|
| 129.01 | 50.20 | 258.42 |
The principal national oil corporation and downstream petroleum major in India is Indian Oil Corpn. Ltd. The nation's largest and most expansive network of petrol and diesel stations is run by this corporation.
Returns:
| 1Y Return (%) | 3Y Return (%) | 5Y Return (%) |
|---|---|---|
| 90.81 | 140.46 | 69.39 |
Office Parks at Embassy In India, real estate and related assets that generate rent or income are owned, managed, and invested in by REITs. It is the largest official REIT by area in Asia and the first publicly traded REIT in India.
Returns:
| 1Y Return (%) | 3Y Return (%) | 5Y Return (%) |
|---|---|---|
| 11.15 | - | - |
Among Maharashtra's public sector banks, Bank of Maharashtra boasts the most extensive branch network.The bank provides a range of services, including personal banking, which includes deposit accounts, savings accounts, credit cards, RTGS, personal and education loans, and demat services.
Returns:
| 1Y Return (%) | 3Y Return (%) | 5Y Return (%) |
|---|---|---|
| 105.45 | 149.42 | 339.04 |
One of the top companies in India's petroleum industry is Bharat Petroleum Corp. Ltd.The corporation explores, produces, and sells petroleum and petroleum-related products in retail stores.
Returns:
| 1Y Return (%) | 3Y Return (%) | 5Y Return (%) |
|---|---|---|
| 72.95 | 39.24 | 74.04 |
Here are some of the best dividend-paying stocks last 10 years in india. These companies show potential for growth over the long run, but it's essential to conduct thorough research and consider the risks before investing.
| Highest dividend-paying stocks ( last 10 years ) | 5Y Avg Yield (%) |
|---|---|
| 1. Vedanta Ltd. | 8.7 |
| 2. Aster DM Healthcare Ltd. | 6.75 |
| 3. Embassy Office Parks REIT | 6.13 |
| 4. Hindustan Zinc Ltd. | 5.41 |
| 5. Styrenix Performance Materials Ltd. | 5.28 |
While high-dividend stocks can offer attractive income opportunities, they also come with certain risks that investors should be aware of:
In 2024, dividend stocks offer several advantages for investors:
When selecting dividend stocks for investment, it's crucial to consider several factors to ensure profitability and sustainability. Here are some steps to guide you in choosing profitable dividend stocks:
The Finance Act 2020 significantly changed how dividend income is taxed in India. Here’s what you need to know:
Let’s consider an example to understand how TDS works under the new regulations.
Example Scenario: Mr. Patel received a dividend of Rs. 6,000 from Hindustan Zinc Ltd. on June 15, 2023.
Calculation: Since the dividend income exceeds Rs. 5,000, the company must deduct TDS at 10%.
So, Rs. 600 will be deducted as TDS from Mr. Patel’s dividend income.
Mr. Patel will receive Rs. 5,400 after the TDS deduction.
Before diving into dividend stocks, it's essential to understand and consider certain key ratios:
The dividend yield is like a measuring tape for how much money you can make from owning a stock's dividends. It's a way to see how much bang you get for your buck. Here's how it works: you take the annual dividend per share (that's how much money the company gives you for each share you own) and divide it by the stock's price per share. This gives you a percentage, which is the dividend yield.
So, if a stock's price is ₹100 per share and it pays ₹5 in dividends per year, the dividend yield would be 5%. It's like saying, "For every ₹100 you invest in this stock, you'll get ₹5 back in dividends each year." Dividend yield helps you compare different stocks and see which ones give you the most return for your investment.
| Differences | Dividend Yield | Dividend Ratio |
|---|---|---|
| Definition | Measures the annual dividends per share relative to the stock price. | Indicates the percentage of earnings distributed as dividends. |
| Calculation | Dividend Yield = Annual Dividend per Share / Stock Price | Dividend Ratio = Dividends per Share / Earnings per Share |
| Focus | Focuses on the return on investment in terms of dividend income. | Focuses on the proportion of earnings paid out as dividends. |
| Indicator of | Indicates how much income an investor can expect relative to the stock price. | Reflects the portion of earnings allocated to dividends. |
| Comparison | Allows comparison of dividend income across different stocks. | Allows comparison of dividend payout policies across different companies. |
| Usefulness | Useful for income-oriented investors seeking regular cash flow. | Useful for assessing a company's dividend distribution strategy and financial health. |
| Example | If a stock's price is ₹100 per share and it pays ₹5 in dividends per year, the dividend yield would be 5%. | If a company's earnings per share (EPS) is ₹10 and it pays ₹2 in dividends per share, the dividend ratio would be 20%. |
Investing in the highest dividend paying stocks in India can be a rewarding strategy for generating regular income and achieving long-term financial growth. Investors can make informed decisions by understanding dividend-paying stocks, evaluating important ratios, and considering factors like dividend yield and payout ratio. Knowing the risks associated with high dividend stocks and the tax implications of dividend income in India is crucial. With thorough research and a clear investment strategy, you can build a robust portfolio that leverages the benefits of high dividend-paying stocks. Happy investing!
The highest dividend paying stocks in India are Aster DM Healthcare, Xchanging Solutions, IL&FS Investment Managers, Vedanta and Coal India which are known for their consistent and highest dividend payout stocks in India.
To find high dividend-paying stocks, look for companies with a strong track record of dividend payments, a high dividend yield, and a sustainable dividend payout ratio. Financial news websites, stock screeners, and investment advisors can also provide valuable insights.
1. Vedanta Ltd.
2. Aster DM Healthcare Ltd.
3. Embassy Office Parks REIT
4. Hindustan Zinc Ltd.
5. Styrenix Performance Materials Ltd.
High dividend-paying stocks can be a good investment for those seeking regular income and potential capital appreciation. However, it's important to evaluate the company's financial health, dividend sustainability, and market conditions before investing.
The risks include potential dividend cuts, market volatility, sector-specific challenges, income dependency, interest rate sensitivity, and company-specific risks. Thorough research and diversification can help mitigate these risks.
In India, dividend income is taxed at the applicable income tax rate based on the investor's tax slab. Companies deduct TDS at 10% on dividend payments exceeding ₹5,000 in a financial year. The tax treatment may vary based on the type of investment and the investor's tax status.
